Heartland Farm Mutual Inc. v. Desjardins, 2020 CanLII 80315

Heartland Farm Mutual Inc. vs. Desjardins, 2020 ONLAT 19-008574/AABS

Citation: Heartland Farm Mutual Inc. vs. Desjardins, 2020 ONLAT 19-008574/AABS

Released Date: 10/06/2020

In the matter of an Application pursuant to subsection 280(2) of the Insurance Act, RSO 1990, c I.8., in relation to statutory accident benefits.

Between:

Heartland Farm Mutual Inc.

Applicant

and

Darryl Desjardins

Respondent

DECISION

ADJUDICATOR:

Jesse A. Boyce

APPEARANCES:

For the Applicant:

Linda Kiley

For the Respondent:

No submissions

HEARD:

Via written submissions

OVERVIEW

1D.D., the respondent in this matter, was involved in an accident on November 28, 2017, and sought income replacement benefits (IRB) from the applicant, Heartland, pursuant to the Statutory Accident Benefits Schedule - Effective September 1, 2010 (Schedule).

2On December 13, 2017, D.D. submitted an application to Heartland for IRBs, claiming that his accident-related impairments had prevented him from working at ["KM"] since November 29, 2017. The application stated that D.D. had been working at KM from September 4, 2017 to "current" and requested that the IRBs be paid based on the last 52 weeks of his income. An Employer's Confirmation Form (OCF-2) and Disability Certificate (OCF-3) followed.

3Heartland paid D.D. IRBs at the rate of $303.65 per week for the period from December 5, 2017 to July 7, 2018. Around that time, Heartland received an updated OCF-3 indicating he could return to work. A s. 44 Insurer's Examination (IE) was scheduled to determine D.D.'s continuing entitlement to the IRB. D.D. did not attend for the assessment.

4Heartland then contacted D.D.'s now-previous law firm and was informed that D.D. was laid off work at KM in October 2017, over one month before the accident, due to the seasonal nature of his work. D.D.'s previous law firm confirmed that he had not returned to work since.

5On July 11, 2018, D.D.'s previous law firm provided Heartland with two Records of Employment (ROE) reflecting two periods of pre-accident employment. The first ROE was from ["NMP"] and indicated that D.D. only worked there from June 8, 2017 to July 8, 2017 and was terminated due to a shortage of work. The second ROE was from KM and indicated that D.D. only worked there from August 28, 2017 to October 20, 2017.

6Heartland wrote to D.D. advising him that it was terminating his IRB effective July 3, 2018 on the basis of the two ROEs that indicated his employment was terminated prior to the date of the accident. As a result, he was not entitled to an IRB as he was not employed or receiving employment insurance (EI) benefits. Further, Heartland advised that the two ROEs did not support that D.D. was employed for 26 of the prior 52 weeks, as he had initially claimed he was in his application. Heartland confirmed that it had not received any other evidence from D.D. that he had worked for another employer other than NMP and KM and his ROEs only reflected eight weeks of total employment in the pre-accident period. Heartland invited D.D. to provide evidence of other employment to prove his continuing entitlement to the IRB.

7D.D. not respond to Heartland's initial request for information or any of its subsequent letters. In the absence of a response or documentation proving that he was entitled to the benefit, Heartland concluded that D.D. did not meet the criteria for an IRB and, via letter dated July 26, 2018, sought repayment of the total benefits paid in the amount of $9,197.65 under s. 52 of the Schedule.

8Several months went by without a response from D.D. Heartland continued to send correspondence to D.D. and his former law firm seeking repayment. On March 3, 2019, D.D. attempted to re-elect his weekly benefit via an OCF-10 form, seeking entitlement to a non-earner benefit (NEB) instead of an IRB.

9Heartland then filed an application with the Tribunal seeking repayment of the IRB plus interest due to discrepancies in the information D.D. provided in his application. D.D. did not file a response to Heartland's application, did not attend several case conferences or resumptions and did not provide any of the particulars requested by Heartland and ordered by the Tribunal. To date, D.D. has not responded to Heartland's repayment request and also failed to provide submissions for this written hearing, which was set down in his absence.

ISSUES IN DISPUTE

10According to the Case Conference Order dated April 6, 2020, the issues in dispute are as follows:

i. Is the applicant entitled to the repayment of the income replacement benefit in the amount of $9,197.65 paid to the respondent at a weekly rate of $303.65 for the period December 5, 2017 until July 7, 2018?

ii. Is the applicant entitled to interest on paid income replacement benefit in the amount of $9,197.65?

RESULT

11Heartland is entitled to repayment under s. 52 in the amount of $9,197.65, plus applicable interest, as a result of D.D.'s wilful misrepresentation or fraud.

ANALYSIS

Section 52

12Section 52 of the Schedule concerns the repayment of benefits. Under s. 52(1)(a), a person is liable to repay to the insurer any benefit that is "paid to the person" as a result of an "error on the part of the insurer," the insured person or any other person, or as a result of wilful misrepresentation or fraud. Sections 52(2) and (3) provide timelines for repayment requests if a person is liable to repay an amount to an insurer. The insurer shall give the person notice of the amount that is required to be repaid. If the notice required is not given within 12 months after the payment of the amount that is to be repaid, the person to whom the notice would have been given ceases to be liable to repay the amount unless it was originally paid to the person as a result of wilful misrepresentation or fraud.

13Heartland has the burden of proving that the benefits were paid to D.D. as a result of an error or wilful misrepresentation or fraud on a balance of probabilities. I find that Heartland has demonstrated that it meets all of the requirements under s. 52 to justify repayment on the basis of wilful misrepresentation or fraud.¹

14I agree with Heartland that, on the evidence, D.D. willfully misrepresented his employment status with KM when he applied for IRBs. In good faith, Heartland paid the IRBs for the period December 7, 2017 to July 7, 2018. The two ROEs that were later provided to Heartland by D.D.'s previous law firm confirm that D.D. was only employed for a total of eight weeks in the 52 weeks preceding the accident, a fact that D.D. has not refuted despite being provided with multiple opportunities to do so. More concerning, the ROE from KM indicates that D.D. was not employed on November 28, 2017—the date of the accident—as he had been terminated over one month prior due to the seasonal nature of his work. This fact, combined with the fact that D.D. did not provide evidence that he was receiving EI, means that he was not eligible for IRB, as he does not meet any of the criteria under s. 5 of the Schedule. That D.D. later tried to re-elect to receive a NEB at the same time he was ignoring Heartland's request for repayment of the IRB provides further proof, in my view, that he was aware that he did not meet the criteria for IRB and was receiving Heartland's notices.

15Accordingly, I find the evidence indicates that Heartland paid D.D. IRB for the period in dispute as a result of wilful misrepresentation about his employment at the time of the accident. D.D. has not provided any evidence to the contrary and has continuously evaded Heartland's requests for information and repayment. As a result, I find Heartland has demonstrated that it meets s. 52(1)(a).

16Further, pursuant to s. 52(2) and (3), I find Heartland's notice of request for repayment meets the timeline criteria to support its claim. Heartland provided notice to D.D. of its intention to seek repayment promptly on July 26, 2018 after receiving the two ROEs on July 11, 2018, which I find is well within the 12-month period prescribed by s. 52(2). Heartland also sent follow-up notices on October 22, 2018, November 7, 2018 and March 29, 2019. On review, the initial and subsequent notices sent to D.D. meet the criteria outlined in s. 52(3), as they clearly state the type of benefit paid (IRB), the payment period for which payment is sought (December 5, 2017 until July 7, 2018) and the amount of repayment sought ($9,197.65, being the amount in dispute).² Heartland complied with all of the procedural requirements for a s. 52 repayment request.

17Heartland seeks interest on the repayment. Sections 52(5) and (6) provide guidance on when an insurer may recover interest when seeking repayment. The insurer may charge interest on the outstanding balance of the amount to be repaid for the period starting on the 15th day after the notice is given and ending on the day repayment is received in full, calculated at the bank rate in effect on the 15th day after the notice is given. Section 52(6) indicates that "bank rate" means the bank rate established by the Bank of Canada as the minimum rate at which the Bank of Canada makes short term advances to the banks listed in Schedule I to the Bank Act (Canada). Accordingly, as I find Heartland is entitled to a repayment of amounts paid to D.D. as a result of wilful misrepresentation or fraud under s. 52, it follows that interest is payable on any overdue amounts under s. 52(5).

18In submissions, Heartland also sought a costs order against D.D. under Rule 19 of the Tribunal's Common Rules of Practice and Procedure. It alleges D.D. acted unreasonably, vexatiously and in bad faith in these proceedings as a result of his wilful misrepresentation of his employment, his failure to provide documentation requested by Heartland and ordered by the Tribunal, his failure to attend several case conferences and his failure to make submissions for this hearing. Heartland did not make a specific costs request. I find, in any event, that a costs award is not appropriate, as D.D. has not participated in the Tribunal's process and his behaviour—while understandably frustrating to Heartland—did not impede the Tribunal's ability to conduct a fair and efficient hearing on the merits.

ORDER

19Heartland is entitled to a repayment under s. 52 in the amount of $9,197.65, plus applicable interest, as a result of IRB payments made on the basis of D.D.'s wilful misrepresentation.

Footnotes

1. 1See, Michalowski v. St. Paul Fire and Marine Insurance Company, (FSCO A98-001492, July 9, 1999).
2. 2See, Intact Insurance v. Marianyagam, 2016 ONSC 1479, at 45.